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Correction: Egypt-El-Sissi's Run story

The Associated Press

Updated:
03/09/2014 09:17:21 AM EDT

CAIRO—In a story March 8 about Egypt's military chief Abdel-Fattah el-Sissi, The Associated Press reported erroneously how much Egypt spends annually on fuel subsidies. The country spends nearly $20 billion a year, not $2 billion.

CAIRO (AP)—As he nears announcing a run for Egypt's presidency, Field Marshal Abdel-Fattah el-Sissi has been focusing on preparing an economic program, senior generals and government officials say, demonstrating the wariness within the military over the scale of problems facing the country.

The military, Egypt's most powerful institution, has put its reputation on the line with an el-Sissi presidency, after its top generals publicly backed his candidacy in January. That means it too could face a public backlash if his administration fails in a country that since 2011 has already risen up in massive protests against two presidents.

Two generals close to el-Sissi said the military was well aware of the difficulty in repairing an economy in need of reform even before the 2011 fall of longtime autocrat Hosni Mubark and further wrecked by turmoil since. The two and other government officials spoke to The Associated Press on condition of anonymity to discuss the candidacy in line with regulations.

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"We love him where he is, but he has decided to jump into a fireball," said one army general of el-Sissi, who currently holds the posts of defense minister, deputy prime minister and commander of the armed forces. "Where he is now is the best place for him and where we in the army want him to be, but if the people want him to be president, then he must go."

The second general noted that public expectations are "very high, and the problems are too many and that is a dangerous situation."

El-Sissi last week gave the strongest indication to date that he intends to seek the nation's highest office, telling army cadets that he cannot "turn his back on" popular demand.

He is seen as virtually certain to win, given the wave of public fervor for the military chief since he ousted Egypt's first freely elected president, Islamist Mohammed Morsi, after massive protests against him.

Hamdeen Sabahi, a leftist politician who finished a strong third in Egypt's 2012 presidential election, and a retired chief of staff of the armed forces, Sami Anan, have already announced their intention to run.

Though he would have to leave the military to run, el-Sissi would become Egypt's fifth president to come from the military since the ouster of the monarchy in the 1950s. The only exception is Morsi, who held office only a year.

On Saturday, interim President Adly Mansour issued a law regulating the upcoming election, which is expected to be held by the end of April. In his comments to the cadets, el-Sissi hinted that he was waiting for the law to be passed before officially announcing his candidacy.

Several government officials said el-Sissi has secured a large aid package from wealthy Gulf Arab nations and allies—Saudi Arabia, the United Arab Emirates and Kuwait—that would help keep the nation's troubled economy afloat, thus maintaining his popularity while pushing on with painful economic reform, like lifting or restructuring the massive fuel and bread subsidies that account for nearly half of all government spending.

They could not reveal the size of the package. Those three nations have already poured $12 billion into Egypt in an emergency package after Morsi's ouster.

The officials also said el-Sissi plans to create jobs and give the nation something to rally behind with a series of mega-projects, like building homes, improving education and vocational training for the hundreds of thousands of homeless children and construction of a nuclear reactor that would reduce Egypt's reliance on oil.

El-Sissi has already served notice that he has a free economy mentality.

In leaked comments made in closed meetings, he made clear that state subsidies on basic food stuffs and energy—an enduring legacy from the socialist 1960s days of President Gamal Abdel-Nasser that are a massive drain on the budget—must entirely go or be restructured.

Fuel subsidies are the biggest drain on the economy, swallowing up nearly $20 billion a year. Economists say that they mostly benefit rich industrialists with energy-dependent businesses.

With tourists and investors staying away because of the country's turmoil, millions are now unemployed. Seemingly endless strikes, sit-ins and street protests have reduced productivity and produced traffic congestion in Cairo that economists say have cost the nation millions of work hours.

"This problem (of energy subsidies) has been left over from one president to another till it reached a point where it could not be ignored anymore because it's not on a sustainable path," said Samer Atallah, an economist who lectures at the American University in Cairo. "He'll also have to face a new wave of labor strikes. ... The demands of the workers have never been achieved, all what they get is promises that are not kept."

The economic woes are intertwined with Egypt's political instability.

A major crackdown by the military-backed government against Morsi's supporters and allied Islamists has led to the death of at least 2,000 people and the imprisonment of thousands more, giving the country the image of a nation torn by strife and divisions. On Friday, a group of 27 countries on the U.N. Human Rights Council expressed concerns over what it said was Egypt's wide-scale use of violence against opposition protesters, the first reprimand from the international body since the crackdown on dissent in the country began.

Protests by Morsi supporters and their Islamist allies have waned in the face of the crackdown, but el-Sissi's presidency only may enflame them.

El-Sissi is already lowering expectations and saying Egyptians are ultimately responsible for solving the nation's woes.

"Don't ever think that any one person can solve the problems of Egypt, no matter who you elect to be president," he said in his address Tuesday. "No, they will be solved by all of us. God helps those who work as a team."

El-Sissi became blunter about the nation's woes in televised comments aired Thursday. Egypt, he said, spends $23 billion on development, when it needs $430 billion to meet its basic requirements.

"We have very serious problems in Egypt that have not been addressed in 30 years. Patriotism is not just talk," he said. "Nations are never built with words, but with work and persistence. Maybe a generation or two will not reap the benefits, but that may be necessary so others can live." He also implicitly appealed on Egyptians working abroad to donate to their country and on Egyptians at home to walk to work when they can.

His "tightening the belt" talk has not gone down well with some, not surprisingly given that nearly half of Egypt's 94 million people live in poverty.

"Tightening the belt strategy can work but not for the poor who struggle to meet their basic needs," said Heba el-Laithy, an economist who lectures at Cairo University. "You cannot tell that to workers who do not have a channel to voice their demands except through strikes."

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